Miners soar but tech stocks, banks weigh down ASX
Staff reporter
Updated ,first published
The Australian sharemarket has drifted lower at the open despite strong gains for the big miners, with banks and tech stocks weighing down the bourse.
The S&P/ASX 200 was 21 points, or 0.2 per cent lower, to 8836.1 points in early trade, with nine of 11 industry sectors in negative territory.
Mining stocks are sharply higher, with gold and silver rebounding overnight to continue their wild swings in recent days. Among gold miners, Northern Star soared 5.9 per cent and Evolution Mining climbed 2.9 per cent, while silver giant South32 rose 3.6 per cent. A jump in copper prices boosted the iron ore heavyweights, with BHP bouncing 3.7 per cent, Rio Tinto surging 3.5 per cent and Fortescue was 1.2 per cent higher.
Financial stocks retreated, with Commonwealth Bank losing 1.1 per cent, Westpac down 1.7 per cent while National Australia Bank and ANZ Bank each shed 0.9 per cent. All four banks have said they will pass on the Reserve Bank’s interest rate hike in full.
Local technology shares slumped after heavy falls on Wall Street’s Nasdaq overnight, with Xero diving 12.1 per cent, WiseTech 5.5 per cent and TechnologyOne diving 6.2 per cent.
Energy stocks advanced as oil prices strengthened. Woodside Energy added 0.9 per cent, Santos jumped 1.8 per cent and Yancoal was 1.9 per cent higher in early trade.
The Australian dollar was trading at at US70.17¢ at 10.45am AEDT.
Overnight, the S&P 500 fell 0.8 per cent and pulled further from its all-time high set last week. The Dow Jones dipped 166 points, or 0.3 per cent, and the Nasdaq composite sank 1.4 per cent.
The Australian sharemarket is set to decline, with futures at pointing to a fall of 20 points, or 0.2 per cent, at the open. The ASX added 0.9 per cent on Tuesday, while the RBA raised rates for the first time in more than two years.
Several influential Big Tech stocks weighed on the market, including drops of 2.8 per cent for Nvidia and 2.9 per cent for Microsoft. Such giants have been hampered by worries that their stock prices shot too high and became too expensive following their years-long dominance of the market.
Stocks of software companies and others seen as potential losers to competitors powered by artificial intelligence also slumped. ServiceNow fell 7 per cent to bring its loss for the young year so far to 28.3 per cent.
Such declines dragged the S&P 500 to its fourth loss in the last five days, even though the majority of stocks in the index rose. That included a 6.8 per cent climb for Palantir Technologies, which reported a bigger profit for the latest quarter than analysts expected. Its forecast for 61 per cent growth in revenue this year also topped analysts’ expectations.
Some of the day’s strongest action remained in the metals markets. Gold’s price climbed 6.1 per cent to settle at $US4935.00 per ounce in the latest swing since its jaw-dropping rally suddenly halted last week. Silver’s price, which has been whipping through even wilder moves, rallied 8.2 per cent.
Gold and silver prices had been climbing for more than a year as investors looked for safer places to park their cash amid worries about everything from tariffs to a weaker US dollar to heavy debt loads for governments worldwide. Their prices took off in particular last month, and gold’s price at one point had roughly doubled over 12 months.
But those rallies suddenly gave out last week, and gold’s price dropped from close to $US5600 to less than $US4500 on Monday. Silver plunged 31.4 per cent on Friday alone.
Many traders say that what turned the momentum was expectations that President Donald Trump’s nominee to lead the Federal Reserve will keep interest rates high to fight inflation, though some disagree. Most agree that simple gravity took over afterward.
After gold and silver prices had shot up so much, so quickly, they were bound to fall back at some point, particularly with so many investors piling in to gold as a way to bet on continued weakness for the US dollar.
“The move underscored how stretched anti-USD positioning had become,” according to strategists at Barclays.
On Wall Street, PayPal dropped 20.3 per cent after reporting weaker results for the latest quarter than analysts expected. It also named a new CEO after it said “the pace of change and execution” over the last two years “was not in line” with the board of directors’ expectations.
Pfizer fell 3.3 per cent even though it reported stronger profit for the latest quarter than analysts expected. The pharmaceutical company gave a forecasted range for profit in 2026 whose midpoint was below analysts’ expectations.
The Walt Disney Co. slipped 0.2 per cent after it said Josh D’Amaro, head of the company’s parks business, will become its next CEO in March.
With AP
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